Canadian archaeologists have found a British ship abandoned more than 150 years ago in the quest for the north-west passage, the fabled sea route across North America, the head of the team said.

Marc-Andre Bernier, Parks Canada's head of underwater archaeology, said the HMS Investigator was found in shallow water in Mercy Bay along the northern coast of Banks Island in Canada's western Arctic. The ship had been abandoned in the ice in 1853 while trying to find the doomed earlier expedition of Sir John Franklin.

"The ship is standing upright in very good condition. It's standing in about 11 metre (36 feet) of water," he said. "This is the ship that sailed the last leg of the north-west passage."

The Investigator was one of many American and British ships sent in search of the HMS Erebus and the Terror, vessels commanded by Franklin in his ill-fated hunt for the north-west passage in 1845.

The Canadian environment minister, Jim Prentice, said the British government has been informed of the find, as well as the discovery of the bodies of three sailors.

Captained by Robert McClure, the Investigator set sail in 1850. When McClure brought the ship into the strait that now bears his name, he realised that he was on the final leg of the north-west passage.

But before he could sail into the Beaufort Sea, the ship was blocked by pack ice and forced to winter in Prince of Wales Strait, along the east coast of Banks Island.

The following summer, McClure tried again to sail to the end of the passage, but was again blocked by ice. He steered the ship and crew into a large bay on the island's north coast which he named the Bay of Mercy.

There they were to remain until 1853, when they were rescued by the crew of the HMS Resolute. The Investigator was abandoned.

"This is actually a human history," said Bernier. "Not only a history of the passage, but the history of a crew of 60 men who had to overwinter three times in the Arctic not knowing if they were going to survive."

The Parks Canada team arrived at Mercy Bay on 22 July. Three days later, the ice on the bay cleared enough that researchers were able to deploy side-scanning sonar from a small inflatable boat over the site where they believed the wooden ship had eventually sunk. Within 15 minutes, the Investigator was found.

The masts and rigging have long been sheared off by ice and weather. But the icy waters of the McClure Strait has preserved the vessel in remarkably good condition.

"It's incredible," said Prentice from Mercy Bay. "You're actually able to peer down into the water and see not only the outline of the ship but actually the individual timbers.

The graves of three sailors thought to have died of scurvy have been marked off and will be left undisturbed, said Bernier.